Z Company manufactures custom-designed skins (covers) for iPods and other portable MP3 devices. Variable costs are 6.00 per custom skin, the price is 10, and fixed costs are 65,600.

1. What is the contribution margin for one custom skin? Round your answer to the nearest cent.

2. How many custom skins must Zebra Company sell to break even?

3. If Zebra Company sells 17,000 custom skins, what is the operating income?

4. Calculate the margin of safety in units and in sales revenue if 17,000 custom skins are sold.

Margin of safety in units
Margin of safety in sales revenue